IP Market Updates
July 17, 2017
Read by over 12,000 professionals in the IP, business, and investment community.
Canadians do not like to brag about what they do; everyone knows that! (Being Canadian, the irony isn’t lost on me that I’m actually bragging a bit about this national trait 😊). So upon bidding its farewell to the international IP community after superbly hosting the 2017 edition of the IPBC Global a few weeks ago, Canada celebrated its 150th with, shall we say, discrete fanfare. But the best fireworks came from the courts days later when two major decisions were issued that could change the landscape and the way in which patent rights are enforced in Canada and potentially in North America. Here is why: historically, Canada has been an afterthought when it came to applying for patents, let alone enforcing patent rights. Actually, many Canadian companies do not even bother filing their patents in Canada and have traditionally focused on securing a US patent only (and sometimes abroad) for their inventions. Canada’s market is only one tenth of the US and Canadian IP judges have never really followed the US trend of issuing large awards against patent infringers.
Well, all this changed overnight (10 days ago actually) when the Canadian Federal Court issued a half billion dollar damage award in favor of Dow Chemical against Nova Chemicals. This was by far the largest patent award issued in Canada and, since this was issued by the judge himself (there is no jury trial for patent cases), the chances of it being overturned on appeal are much lower than in the US. In Canada, a victorious Plaintiff in a patent infringement case can choose between its damages OR the defendants’ profits from selling the infringed goods, which is what Dow did, thus leading to a higher award.
The greatest irony of this case, however, is that the very same patent (its US equivalent, to be precise) has been ruled invalid in the US by the Federal Circuit on the basis that its claims were indefinite under the Nautilus doctrine. The same week as the Dow decision but a few days earlier, the Canadian Supreme Court also issued a landmark decision in the AstraZeneca vs. Apotex case, by doing away with the long standing “promise doctrine” whereby an inventor had an additional hurdle to pass before his or her invention could be considered “useful”, which is one requirement for patentability. For a good summary of this case, see here.
So, this goes to show once more that the US legal system has moved in a direction that clearly disfavors patent owners, whereas most other countries recognize the need for a vibrant economy to support a strong patent system. Canada is just the last in line to make that case (actually, almost the same day the UK Supreme Court issued a case that should make proving infringement easier). Since it is relatively easier to obtain an injunction in Canada than in the US (there is no eBay case there), there is no PTAB to declare your patents invalid at a whim and litigation is much cheaper and much more predictable, it is not a stretch to predict that Canadian patents might encounter a resurgence in popularity (and valuation) in the near term. Canadian courts may come to play a similar role as the German ones have played in the past couple of years which was to essentially “export” a lawsuit to a friendlier legal environment where the threat of an injunctive relief (and now of potentially significant damages) might convince an infringer in the US to come to the table and negotiate a worldwide resolution of the case. It will be interesting to see if NPEs start exploring this model rather than trying their hand in China. It is also significantly more common to find US patent portfolios with Canadian rather than Chinese counterparts, at least for those that were filed 10+ years ago and which comprise the lion's share of what is being litigated nowadays.
Meanwhile, if you need any more proof how poorly the current US patent system protects small inventors, please read the following article relating the saga of the Bunch O Balloons inventors (when you see some of the actors involved, you might want to rename this Bunch O Buffoons case…) . Apparently, anyone but the US judges (who obviously never played water balloon tag) can understand what a balloon “substantially filled with water” means! Although the patent owner keeps winning against Walmart, Telebrand, and other infringers, they are now $17 million deep in legal fees and counting, with no closure in sight. This is why we finally have some Congressmen on Capitol Hill who have had enough with the anti-patent troll narrative and have recently filed the STRONGER Patent Act, as we reported a few weeks ago. Smelling the threat, the large tech companies immediately sprang into action and created the HTIA, yet another advocacy group to support patent reform and finally get rids of “bad patents”. The HTIA agenda goes further than traditional lobbying on Capitol Hill; it intends to also influence the Courts and the USPTO, continuing the politicization of what should be neutral bodies.
Elsewhere, we saw a few patent transactions reported, such as Apple buying patents from Korean NPE Goldpeak, which had acquired the patents from the Pantech bankruptcy. Not to be left behind, Xiaomi, one of the most active players in the market recently acquired some Nokia patents and the parties announced a wider cross-patent licensing agreement. In market parlance, Nokia received a lot of cash from Xiaomi (who paid to secure freedom to operate) and continued to successfully monetize its large patent portfolio.
For those interested, the whole patent portfolio (about 250 US assets, most of which came from BodyMedia’s acquisition in 2013) of wearable manufacturer Jawbone is now on the block and some early estimates vary between $25-40M, a far cry from valuations of yesteryears and a fraction only of the $100M Jawbone itself paid for BodyMedia just 3 years ago.
Finally, it should be noted that China will soon make public its new IP antitrust policy; companies like Qualcomm who have already been on the receiving end of the antitrust stick in China might not like what lies ahead. After a relatively hands-off approach letting the Chinese IP courts create a fairly positive environment for patent owners regardless of the country of origin, this might be the Chinese government’s way of sending a message to large companies to tread carefully in the future when enforcing their patents on Chinese soil against local companies. Remember, in China the house always wins!
Other news and recently announced deals below…
Patents and secrets in the chemical industry
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Eleventh Hour Settlement in Cialis Patent Suit Clears Path for Generics
The National Law Journal
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Jawbone may be dead, but its patent assets could be worth as much as $40 million
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Canada Capitulates: Supreme Court Throws Away Government's Great Pharma Patent Victory
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Uniloc continues legal assault against Apple with two new patent suits
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Stryker awarded $248.7 million in patent case against Zimmer
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UK Supreme Court adopts new approach to patent infringement
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Qualcomm ramps up its patent battle against Apple by asserting six non-SEPs in Section 337
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Is Congressman Darrell Issa a patent troll?
“Patent trolls, in my opinion, are the scourge of the patent world,” said Congressman Darrell Issa (R-CA) at a House IP subcommittee hearing on June (more…)
Broad Institute Joins CRISPR Patent Pool Talks
Genetic Engineering & Biotechnology News
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Waymo drops most patent claims in self driving car tech fight with Uber
Waymo, Alphabet's self-driving car division, dropped three of four patent-infringement claims in its lawsuit against Uber over the startup's autonomous (more…)
Are Utility Patents Tying Up Innovation With Litigation?
That's why the Plant Patent Act of 1930 protects asexually propagated plants from being illegally propagated, and for plants that are patented under (more…)
Column: How cannabis patents could pave the way for future lawsuits
As a professor who researches and teaches in the area of patent law, I have been monitoring how private companies are quietly securing these (more…)
Xiaomi just acquired a bunch of patents from Nokia, will boost its global expansion
The Indian Express
Xiaomi Corp has acquired a swathe of patents from Nokia, making its latest acquisition of technology to drive a global expansion. The Chinese (more…)
Was America's Industrial Revolution Based on Trade Secret Theft?
Moreover, Britain, like some other European countries, frequently granted “patents of importation,” which didn't require the applicant to be an inventor, (more…)
OpsArc Solutions Inc. Announces Intellectual Property Acquisition
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VERVE Completes Acquisition of Sense Networks’ Software and Intellectual Property Assets from YP, LLC
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Frontier IP Group enters a strategic drug discovery collaboration with GlaxoSmithKline
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